On February 16, the UK Financial Services Authority (FSA) published the final notices it had issued to three executives of Genel Enerji A.S., a Turkish oil exploration company, after finding all three men (Mehmet Sepil, Murat Ozgul and Levent Akca) had engaged in market abuse relating to dealing in the shares of Heritage Oil Plc, a UK listed company.
The fine imposed on Mr. Sepil, Genel’s chief executive officer, was £967,005 (approximately $ 1,509,500), the largest market abuse fine by the FSA against an individual. The FSA fined Mr. Ozgul, Genel’s chief commercial officer, and Mr. Akca, its exploration manager, £105,240 (approximately $164,250) and £94,062 (approximately $146,800), respectively. The fines reflected a 30% discount for settlement at an early stage of the FSA’s investigation. Each fine included a sum representing disgorgement of profits: respectively £267,005 ($411,529), £35,240 ($54,315) and £10,062 ($15,507).
In March 2009, Genel entered into a joint venture with Heritage, regarding the exploration of the Miran oil field in Northern Iraq. On May 4, all three executives flew to London and discussed the positive test results which had been received from the oil field. The following day they all purchased Heritage shares.
On May 6, Heritage announced the results of the drilling tests at Miran and its share price increased by approximately 25%. On the same day, the three Genel executives sold their Heritage shares.
In each case, the FSA final notices state that the level of the penalty reflects the fact that the three men voluntarily contacted the FSA, expressed remorse, made admissions as to their conduct and cooperated in the FSA’s investigation. The final notices also contain findings that the men did not set out to commit market abuse, were not familiar with the legal requirements which prohibited them from dealing in Heritage shares, and had not received legal advice at the time. Nonetheless, the FSA concluded that they were serious examples of insider dealing by persons in positions of responsibility, and in determining the appropriate level of the fine, the FSA considered, among other things, the need to punish them appropriately to deter others in similar positions from committing market abuse.
Click here to read the final notice for Mehmet Sepil.
Click here to read the final notice for Murat Ozgul.
Click here to read the final notice for Levent Akca.